Crude Flows Through Strait of Hormuz Reach 76% of Prewar Levels Amid Diesel Shortage

Crude oil shipments through the Strait of Hormuz have rebounded to approximately 10.3 million barrels per day, representing about 76% of prewar levels, according to Kpler data. However, the flow of refined products, particularly diesel, remains critically low, accounting for only around 1.3 million barrels per day, or 11% of total flows, a significant drop from over 20% prior to the conflict in the region. This disparity highlights ongoing damage to refineries across the Gulf, which have been affected by missile strikes and other war-related disruptions.

Despite a surge in Saudi crude exports, which doubled to around 7 million barrels per day in September, the global diesel shortage persists. Major Asian refiners in countries such as China, Japan, and South Korea are retaining most of their refined fuel output, limiting exports and exacerbating the tight market. As a result, the United States has emerged as one of the few large suppliers of refined fuel, with diesel prices reaching a record average of approximately $6.50 per gallon last month, and even higher in some states like California, where prices hit around $8.40.

Analysts predict that a full recovery in refined product availability may not occur until well into 2027, as repairs to oil fields and refineries are needed to restore production levels. The Trump administration has sought assistance from allies, with the Group of Seven economies agreeing to release 100 million barrels of crude and fuel from emergency reserves, although they did not impose restrictions on diesel exports. Meanwhile, U.S. oil executives have urged the Navy to prioritize the protection of product tankers carrying diesel amid ongoing security concerns in the region.

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Source: KLEA News